BIA/Kelsey 2014 Picks and Predictions

BIA/Kelsey’s 2014
Picks & Predictions
January 2014

Executive Summary
 Every January, BIA/Kelsey issues its “Picks and
Predictions” for the year ahead, offering our best guess
of what the year will bring in local, social, mobile,
directional, vertical and video advertising and promotions.

 This year’s predictions cover a wide range of hot
button local media topics, from native advertising
and media attribution to TV everywhere and the
influence of social content on search.

 BIA/Kelsey analysts will present highlights of their 2014
predictions on a January 23 webinar.

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© 2014 BIA/Kelsey. All Rights Reserved.

Industry Analysts with Keen Insights
MARK FRATRIK

JED WILLIAMS

VP, Research & Chief Economist

VP Consulting & Sr. Analyst, Social

RICK DUCEY
Managing Director

PETER KRASILOVSKY

CHARLES LAUGHLIN

VP Conferences, Sr. Analyst,
Loyalty & Transactions

SVP & Managing Editor

CELINE MATTHIESSEN
VP, Insights & Analytics

MICHAEL BOLAND

SUZANNE ACKLEY

VP Content &
Sr. Analyst, Mobile

Senior Research Analyst

STEVE MARSHALL
Director, Research

GEOFF PRICE
VP, Valuations &
Financial Consulting

ABID CHAUDHRY
Sr. Director, Industry
Strategy & Insight

JEANNE DIXON DATILLO
Sr. Analyst, Media Valuations

REBECCA
WEINGARTNER
Associate Analyst

MESHACH CISERO
Associate Analyst
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Quick Take: Our 2014 Predictions
No. 1: The New Era of Non-Advertising?
No. 2: Native Advertising Achieves Local Scale
No. 3: Attribution Boon for Transaction Marketing
No. 4: Digital Agencies Go Mainstream
No. 5: Big Data Drives Local Discovery
No. 6: The Sharing Economy Spawns Verticals
No. 7: Local SERPs Get a SoLo Makeover
No. 8: National Retailers Go Local
No. 9: TV vs. Social
No. 10: RIP PYP
No. 11: ‘SMBs’ Are Redefined
No. 12: Local-Digital Media Investment Soars
No. 13: Developers Shift to SMB-Facing Apps
No. 14: TV Everywhere Drives Video Innovation
No. 15: YPs Go on Verticals Acquisition Binge
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No. 1: The New Era of Non-Advertising?
“In 2014, we believe BIA/Kelsey
survey research (Local
Commerce Monitor™ and
Consumer Commerce Monitor™)
will demonstrate a clear move by
SMBs away from purchased
media (both print and online) to
other forms of customer outreach
and engagement, notably social
media and transaction marketing.”

STEPHEN MARSHALL
Research Director

5

“After a year of intense buzz and heavy experimentation,
native advertising will begin to live up to its immense
potential in 2014 by achieving scale at the local level. The
challenge will be to divide native inventory between direct
sales efforts and exchanges. Smaller advertisers will need
help understanding the ROI that native advertising can deliver
as part of larger content marketing initiatives.”

JED WILLIAMS
VP Consulting & Senior Analyst, Social Media
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U.S. Social Display vs. Native Ad Spend: 2012-2017 Forecast
Social Display

Social Native

$14

$12
2012-2016
CAGRs:
US$ Billions

$10
$5.0
$4.4

$8
$3.7

Social Display
CAGR 18.3%

$3.1

$6

$2.4
$4

Social Native
CAGR 29.6%

$1.4

$4.3

$2

Total Social
CAGR 22.4%

$4.9

$5.5

$6.1

$6.8

$2.9
$0
2012

2013

2014

2015

2016

2017

Note: Numbers are rounded.

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No. 3: Attribution Boon for Transaction Marketing
“One of the biggest problems for
local marketers is proving attribution
– especially as users effortlessly
move from a banquet of ‘spreadable
media’ – everything from articles to
email to social media posts to
YouTube. It is another reason we
expect to see big things from
transactional and loyalty media in
2014 – the receipts say it all.”

PETER KRASILOVSKY
VP & Senior Analyst,
Transactions and Loyalty
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No. 4: Digital Agencies Go Mainstream
“The digital agency
business model will go
mainstream in 2014,
with offline media seeking
incremental growth from
digital. Cross-media
attribution will become a
much bigger issue as a
natural outcome of the
digital agencies’ growing
presence in the market.”

RICK DUCEY
Managing Director & Senior Analyst, Video
9

No. 5: Big Data Drives Local Discovery
“Big data will continue to collide with mobile in
2014 and inspire app layer innovation in the form
of personalized local discovery tools like Google
Now. Push alerts will engage users outside of apps,
and swipe-able card-based interfaces will replace the
traditional SERP within apps. We see this already in
local discovery (weotta, Google Now), social (Tinder),
and multimedia (Swell). This same data-driven
content delivery ‘push’ won’t just apply to apps but
also to more relevant and effective ad delivery.”

MICHAEL BOLAND
VP Content &
Senior Analyst, Mobile

10

No. 6: The Sharing Economy Spawns Verticals
“One of the big local breakthroughs has
been the development of shared listing
sites for apartments (Airbnb), vacation
rentals (BRBO) and rides (Uber). In
2014, we expect shared listings to
become more ubiquitous, with
multiple entries per vertical, plus the
addition of many more verticals.”

PETER KRASILOVSKY
VP & Sr. Analyst, Transactions & Loyalty
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No. 7: Local SERPs Get a SoLo Makeover
“This year, search engine results pages will
get a makeover as search engines and now
social platforms (Facebook, Twitter, LinkedIn)
leverage social data points within search results.
This will reverberate across the PPC/SEO
spaces, as well as among companies that work
within mobile.”

ABID CHAUDHRY
Sr. Director, Industry Strategy & Insight
12

“Retailers will increasingly look beyond
their own inventory and customer base
this year to become buyer hubs that
also incorporate local sellers. Amazon
has been signaling this trend in recent
years, with online stores, comparison
shopping, product inventory and product
listing ads bringing new revenue streams.
The rise of social media is accelerating
this sea change. One example of this
trend: QVC’s December 2012 acquisition
of social classifieds platform Oodle.”

PETER KRASILOVSKY
VP & Sr. Analyst, Transactions & Loyalty
13

No. 9: TV vs. Social

“Social media platforms will more
aggressively grab ad dollars from
television, with the introduction of
video ads and the acquisitions of
partner tools like Facebook’s Sport
Stream. Another example – Twitter’s
deal with Nielsen to produce Twitter
TV ratings.”

MESHACH CISERO
Associate Analyst
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No. 10: RIP PYP
“In 2014, we anticipate more exits or
substantial pullbacks from the print
business by major global directory
organizations. Print may continue to drive
substantial leads and margin at many
organizations, but the argument is shifting
to whether publishers can justify the costs
associated with print. In 2014, the Nordic
publisher Eniro will complete its phase out
of print Yellow Pages, and the markets
have rewarded the company for
thoughtfully transforming itself into a true
post-print publisher.”
CHARLES LAUGHLIN
SVP & Senior Analyst,
Directional Media

15

No. 11: ‘SMBs’ Are Redefined
“As digital local media advertising and marketing become
omni-channel integrated platforms, we will see a push to
redefine the core base of customers. In 2014, we will see
more breakouts of ‘SMB’ into multiple subcategories –
including ‘VSBs’ (sub 20 employees), ‘MBs’ and ‘brand
networks’ to cover multi-location businesses. Much of this
activity will be caused by the shift from performance
advertising to ‘engagement marketing.’ Other factors include
metrics-driven sales and varying price/cost models.”

ABID CHAUDHRY
Sr. Director, Industry
Strategy & Insight

16

“The past year saw a moderate increase in total M&A deals
(private placements & acquisitions), but a sharp rise in
reported deal value (+65%). This surge in deal value will
continue in 2014. We expect 20% to 30% growth in deal
value this year, propelled by a few key sectors: vertical
commerce marketplaces; integrated customer relationship
and data management platforms; mobile advertising platforms
tied to native programmatic buying; and niche consumerfacing social networks catering to mobile millennials.”

JED WILLIAMS
VP Consulting & Senior Analyst, Social Media
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JANUARY – SEPTEMBER
2012
Deal Value

Deal Volume

2013

% Change

571.8

941.13

65%

19

12

Online in Focus:
CRM / Scheduling

-37%

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“The local space’s love affair with consumer-based mobile
apps will give way to more attention to business-facing
mobile apps that help SMBs acquire new business and
run their business on the go. This will include lots of
operational tools like appointment scheduling and payment
processing and other back office tools that can be accessed
and managed in a mobile interface. The sweet spot is
categories like restaurants and home services where
proprietors are in constant motion.”

MICHAEL BOLAND
VP Content & Senior Analyst, Mobile
19


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No. 14: TV Everywhere Drives Video Innovation

“In 2014, TV broadcasters
will extend their value
propositions cross-screen.
This will further validate the
online and mobile video
categories and drive
innovations and standard
setting in cross-screen
measurement, buying and
analytics.”

RICK DUCEY
Managing Director & Senior Analyst, Video

21

No. 15: YPs Go on Verticals Acquisition Binge

“As directory publishers hasten their
retreat from print, they need to
accelerate growth in their digital
properties, with growth in higher margin
owned media preferred over the lower
margins associated with reseller
products. We expect acquisition of
vertical content around key local
business categories will be a key
priority for global directory organizations
healthy enough for acquisition activity.”

CHARLES LAUGHLIN
SVP & Senior Analyst,
Directional Media

22

A Look Back at Our 2013 Predictions

No. 1: U.S. Mobile Ad Revenues Top $4 Billion
No. 2: SMB Services Occupy the Cloud
No. 3: Rep Management Meets Content Distribution
No. 4: Big Banks Bet on Offers and Loyalty
No. 5: Amazon + Apple + Facebook + Google = Acquisition Frenzy

No. 7: Double-Digit Bump for Online Video Spend

No. 8: Native Ads Come into Focus
No. 9: Finally, Props for Social Advertising

No. 10: Local Sellers Innovate Around the Long Tail

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Our 2013 Predictions Report Card

2013 Prediction
U.S. Mobile Ad
Revenues Top $4
Billion

SMB Services
Occupy the Cloud
Rep Management
Meets Content
Distribution

Big Banks Bet on
Offers and Loyalty

Grade

Comment

A

Based on the estimates we have seen, we appear to have hit the
mark on this prediction. Total 2013 mobile ad revenue will very
likely exceed $4 billion.

B

There is clear momentum towards the cloud and SaaS products
for SMB, but there wasn’t as much movement in 2013 as we
expected – due to the notoriously slow adoption of SMBs.

A-

Last year, presence, reputation and content platforms converged
in two complementary dimensions: discovery & engagement. The
bigger tectonic shift is the foundational role that content now
occupies in the advertising/marketing ecosystem.

B

Banks’ interest in offers and loyalty turned out to be a mixed bag.
While, we saw major banks rollout significant transaction
marketing programs, the efforts weren’t always high priorities for
the banks, which placed their bets in other, safer areas.

24


2013 Prediction

Amazon + Apple +
Facebook +
Google =
Acquisition Frenzy
National Retailers
Go Local

Double-Digit Bump
for Online Video
Spend

Grade

Comment

B

Amazon, Apple, Facebook and Google each made small
acquisitions in 2013, some of which touched on local, such as
mapping and payments. However, “frenzy” was too strong of a word.

A

After years of nonchalance towards local marketing, national
retailers (and brands) ramped up geo-targeting efforts significantly in
2013 as improved technology and marketing programs really
leveraged the local opportunity.

A+

BIA/Kelsey’s Consumer Commerce Monitor™ showed that 15.4% of
consumers regularly use online video for locally purchased products
or services. And our Local Commerce Monitor™ survey of SMBs
shows more than 40% of SMBs use video for advertising and
promotion and these companies spend more than 2X non-video
advertisers. Moreover, 55% of this group plans to increase their ad
spend in 2014.

25

2013 Prediction

Finally, Props for
Social Advertising

Native Ads Come
into Focus

Local Sellers
Innovate Around
the Long Tail

Grade

Comment

A

Social moved beyond novelty and into an integrated advertising
mix that drives engagement and transactions with measurable
ROI. We’ve gone from “what’s the value of a Facebook like?” to
dashboard friendly analytics showing return on spend. Industry
players have developed better platforms and metrics around
social as part of an integrated, cross-channel media mix.

A

Native advertising concepts came into focus for publishers and
channels of all shapes & sizes, driven by innovation on social
networks, extending to pioneering publishers (BuzzFeed, Forbes,
ShareThrough) and beginning to find traction with local media.

C+

Traditional media companies were active in the past year in
reorganizing their sales forces to focus increasingly on expanding
digital growth, with new products targeting new customer
categories. There was less focus than expected on the long tail.

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QUESTIONS & COMMENTS:
CHARLES LAUGHLIN
claughlin@biakelsey.com
(312) 502-9414

This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any
unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under federal law.
BIA/Kelsey disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or
consequential damages that may result from the use or interpretation of this information.

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